A consortium led by VTB Bank of Russia with a minority stake of Ruias is set to make a bid for Essar Steel on Monday. The bids are expected to touch Rs 30 billion. ArcelorMittal and the Tatas are also in the race for the company which has a 10 million tonnes per annum capacity plant in Hazira, Gujarat and is facing National Company Law Tribunal (NCLT) proceedings, after it defaulted on bank loans in December 2015. According to a source, ArcelorMittal is likely to bid alone. ArcelorMittal and Nippon Steel of Japan had done separate due diligence on Essar Steel. They were in a discussion to put in a joint bid. ArcelorMittal declined to comment. The Tatas are expected to make a conservative bid, after it has emerged as the second-highest bidder for Bhushan Steel, Bhushan Power and Electrosteel Steels. JSW Steel, which is leading the race to acquire three companies, is not bidding for Essar, a company official confirmed. The market is not expecting Vedanta to make a bid for Essar Steel, even though it did a due diligence. Sources indicated the cancellation of Goa mines could be a dampener and Vedanta, which was the highest bidder for Electrosteel, may not be in a mood to revise its offer. Tata Steel has already written to the committee of creditors that it was keen on revising its earlier offer. With a liquidation value of Rs 220 billion, Essar Steel is a prized asset for all the bidders.

The company fell into problems, after the government diverted its gas supply to other industries like fertiliser. The company's production also stalled after Naxals blew up its iron slurry pipeline.

Among the bidders, VTB Bank is expected to be the most aggressive, considering their bids are also supported by the present promoters — the Ruias who have taken a minority stake in the bidding company. For ArcelorMittal, if it bids, it will be a first for a stressed asset in India. So far, it has not bid for any stressed company despite conducting due diligence for Bhushan Steel and Bhushan Power & Steel. When the IBC was amended last November to debar promoters of defaulting firms from bidding, it had included a Section 29A which prohibits promoters or sister concerns of companies with NPAs of more than a year from taking part in auctions. To put to rest questions around it, ArcelorMittal sold its stake in Uttam Galva Steels, which is on the RBI's second list of defaulters. Lenders to KSS Petron — a defaulter to the State Bank of India — wants L N Mittal, the promoter of ArcelorMittal, to pay its dues. Mittal owns a 33 per cent stake in KazStroyServices (KSS) of Kazakhstan, in his personal capacity, and KSS owns 100 per cent of KSS Petron, which turned an NPA in 2015. In a statement made earlier, ArcelorMittal has said, it has no connection with Petron and does not believe this company has any relevance to the process. "ArcelorMittal is a financially sound company with strong expertise in turnaround situations," it has maintained.